US retail sales recorded a strong recovery in April, helping ease the negative sentiment regarding the health of the nation’s consumer. The headline figure grew 1.3% m/m as compared with consensus forecast of 0.8%. Moreover, the month-on-month figure for March was upwardly revised to a contraction of 0.3% as compared with the earlier reading of a contraction of 0.4%.

The motor vehicle dealer’s category rebounded strongly in April from its March’s weakness. It grew 3.5% last month, supporting the most in the overall retail sales figure. The strong motor vehicle dealer’s category is a reflection of solid auto sales print in April.

April’s retail sales report underpins the prospect of the recovery of consumption growth in Q2. Personal consumption expenditures, which are estimated to have grown 2% in Q1, is likely to expand 3% in the second quarter, said TD Economics in a research report. As consumer spending contributes two percentage points to the economic growth, this will be enough to push the real GDP growth towards the 2% mark, added TD Economics.

“With our outlook of continued job gains and building wage pressures, we anticipate that consumers will boost expenditures through the remainder of this year”, noted TD Economics.